Case study: Optimizing warehouse technology

Planning warehouses and picking zones is one of the more complex tasks in the logistics industry. Often, only a few planning alternatives are taken into account due to the high costs. COSMO CONSULT has developed a solution for a leading European logistics service provider that the company can use to calculate the cost-optimized warehouse allocation for different picking techniques in just a few minutes.

• Optimizing picking technology for article assortments
• Taking into account relevant processes such as driving or picking times
• Simulation and optimization environment

A leading European logistics service provider with more than 400 locations worldwide has to date been managing the inventories of its warehouses and picking zones using Microsoft Excel. Due to the high complexity of the task and the associated time expenditure, only a few planning alternatives were considered. The company relied heavily on the expertise and experience of individual employees.

The aim of the project was to develop a solution to sustainably optimize the logistics chain and to calculate a cost-optimized allocation of the warehouse into different picking zones, such as pallet storage or small parts storage.

Working closely with the company's experts, COSMO CONSULT first analyzed the existing logic of cost accounting. Subsequently, it was necessary to develop appropriate formulas and parameters, to expand them and to transform them into a clear data structure for implementation. There was a nonlinear relationship between the individual articles, as the distances covered in the picking zone are influenced by other articles.

To determine the optimal order picking technique for each article, we used our own iterative heuristic approach. Subsequently, the overall solution was extended by conducting a preprocessing step so that uncleaned raw data from the customer's system could be used. It was particularly important to correct previously incorrect and inconsistent values.

Today, using a graphical user interface, the company is able to

• manage all changeable parameters
• and store and compare the different simulations in a structured manner.

In addition, the solution made it possible to define in detail what is considered as “implausible” values – for example with regard to the size or weight of a shipping unit. The results can either be compressed on the user interface or be presented in detail in Excel spreadsheets.

Today, in just a few minutes, warehouses can be optimally and automatically aligned to the picking technology. For comparison: In the past, this often required several days. The algorithm takes into account additional parameters and cost rates, which were previously excluded for complexity reasons. Instead of designing warehouses with a limited number of options, a large number of different parameters can now be calculated and optimized within a few minutes. With the included simulation management, process times and costs can be directly compared. In the print version, you can print out the result of the comparison in one page with the corresponding parameter settings.